Choosing a health insurance plan today can be confusing, with options that are as different as the people they’re meant to insure. Although the metal tier designation in the healthcare marketplace is supposed to make the decision easier, you might not understand what these categories mean or how they help you buy coverage.
In an effort to make it easier for consumers to compare plans in the healthcare marketplace, the Affordable Care Act introduced metal categories for major medical coverage: bronze, silver, gold and platinum. Each metal is designed to easily identify how generous the coverage is under that plan. Just as gold is more valuable than bronze, higher-tiered plans offer more generous coverage and better benefits – with a correspondingly higher price tag.
Each tier represents an estimate of what percentage of healthcare coverage will be provided to people who enroll in that particular level as a whole. It is not based on what you pay specifically but an estimate of what a population will use for healthcare services overall. The percentages are known as actuarial values.
Determining actuarial values isn’t easy, and it’s not something you really need to do to buy health insurance. But we wanted to summarize the idea here so you know what we mean when we say that a silver plan covers 70 percent of your healthcare costs. The ACA specifies actuarial percentages for each level of plan. The percentage that must be covered by the insurance company for each tier in the marketplace in 2019 is:
- Bronze: 60 percent
- Silver: 70 percent
- Gold: 80 percent
- Platinum: 90 percent
These percentages may change if you are considered low income, have a health savings account or are eligible for cost-sharing subsidies. In addition, because the tiers are based on how generous a plan is for a standard population, the cost-sharing structure may be different between plans. One plan may offer a higher deductible but lower coinsurance after the deductible is met in order to meet the same actuarial value. Another plan may cover the cost of all doctor visits prior to meeting the deductible but have a higher coinsurance percentage.
To reiterate, having a platinum plan doesn’t mean that your coinsurance rate – your share of the medical bill – will be 10 percent and the plan will pay 90 percent. That might be how the plan is structured, but it’s not a guarantee. Actuarial values mean that a plan will cover about that much in medical costs across the total population of people with that plan. The higher the percentage, the higher the value in covering medical costs.
Higher Tier Means Lower Out-of-Pocket
Platinum plans have the highest premiums, but you will pay much less out of your own pocket when you get medical care. As you move down the tiers, premiums are lower but out-of-pocket costs rise, with bronze plans having the lowest premiums but highest out-of-pocket costs.
For example, a bronze plan may have a monthly premium of $289 with a copay for a doctor’s visit of $60. The same plan at the platinum level may have a premium of $506 but a copay for a doctor’s visit of just $20. With lower-tiered plans, you’ll pay less upfront but more later. Higher-tiered plans require more in advance but less cost-sharing overall.
Choosing a Metal Tier
It might seem like a no-brainer to choose the plan with the least amount of cost-sharing. No one likes paying more for care. But platinum and gold plans can be expensive, sometimes prohibitively so. The best way to choose a metal tier is to look at the options in your area, assess what you can spend for insurance each month and choose the best plan you can afford.
Don’t forget to consider your medical needs, too. Choosing a cheaper plan just based on premium cost is a bad idea, especially if you have healthcare needs that demand regular or frequent care, such as diabetes.
If you’re rarely sick and need nothing more than an annual checkup, you’re healthy and you have no children at home, a bronze plan may be the best option for you. Platinum plans tend to be better if you’re older, need a lot of trips to the doctor to manage a condition or have an expensive condition to treat. Platinum plans tend to look more like the robust benefits that come with job-based coverage from large employers. Silver plans, though, tend to be the most popular choice on Obamacare marketplaces.
Affording the Plan
The best option is to choose a tier that best matches your needs, but if you cannot afford the premiums for that plan, choose the closest option that you can afford. If you choose a plan that you can’t really afford and don’t pay your premiums, your coverage can be cancelled. Losing health insurance during the year can put added strain on your finances, so don’t get stuck with a health plan that costs too much.
A Non-Metal Option: Catastrophic Coverage
Catastrophic plans will continue to be available in 2019. This category of plans is designed for young and healthy people who can’t afford other plans and/or can’t get health insurance through work. The plans have limited eligibility and cannot be purchased using premium subsidies. To qualify for a catastrophic plan, you must be under age 30, or you must meet a hardship or affordability exemption. Hardship exemptions include:
- Caring for ill, disabled or aging family members, which led to unexpected expenses
- Caring for a child who’s ineligible for CHIP or Medicaid
- The death of a family member
Evictions, health plans that have been canceled, domestic violence and a variety of other situations also fall under the hardship exemption clause, so if you have an extenuating circumstance, check with the marketplace for more information. Catastrophic plans are in a separate risk pool from metal plans. This means that catastrophic plans share the risk pool of other catastrophic plans, not with the metal plans, which is why they can keep prices lower than the standard bronze plan. You will have higher cost sharing with these plans.
10 Essential Health Benefits
All metal plans and catastrophic plans must include the 10 essential health benefits required under Obamacare. These are:
- Emergency care
- Laboratory tests
- Maternity and prenatal care
- Rehabilitative care and equipment
- Mental health and substance abuse
- Outpatient (ambulatory) care
- Pediatric services
- Prescription drugs
- Preventive services
When choosing among the four metal tiers and catastrophic plans, consider how often you visit a doctor, the health of you and your family as well as how much you can afford in monthly premiums. Choosing health insurance in 2019 for your family will be different than in previous years as the Trump administration continues to make changes to healthcare coverage requirements. By understanding the differences in major medical via the categories available, you can make sure that you have the health insurance you need at a price you can afford.